More on How to Determine Whether a Measure is a Safeguard Measure

7.30. In this dispute, most of the claims have been raised by Japan under Article XIX of the GATT 1994 and under different provisions of the Agreement on Safeguards. The parties have not questioned the applicability of Article XIX of the GATT 1994 or the Agreement on Safeguards to the dispute. Indeed, both parties agree that the challenged measure is a safeguard within the meaning of Article XIX:1(a) of the GATT 1994 and the Agreement on Safeguards.74 However, given the facts before us and the arguments made by the parties and third parties in this proceeding75, we consider it appropriate to examine whether the measure at issue falls within the scope of the Agreement on Safeguards and Article XIX of the GATT 1994, before addressing the merits of Japan's claims.

The panel later offered the following reasoning in support of its finding that the measure constitutes a safeguard measure:

7.75. We have already noted that the manner in which a Member's domestic law characterizes its own measures is not dispositive of the characterization of such measures under WTO law. Likewise, the manner in which a Member conducts an investigation or notifies measures to the WTO is not dispositive of the legal characterization of the measure. However, all these factors may be relevant elements when considering a measure's design and structure. In this regard, we find that the following elements confirm our conclusion. First, the fact that the Indian competent authority imposed the measure at issue and conducted the respective investigation under domestic legislation that authorizes the Government to impose duties on imports after determining that relevant products are being imported into India in increased quantities and under conditions so as to cause or threaten to cause serious injury to the domestic industry. Second, the fact that the measure at issue had the typical characteristics of a safeguard measure, including (i) that it resulted in duties imposed on imports of the like or directly competitive product to that produced by the affected domestic industry; (ii) that the duties were only temporary; (iii) that the measure was subject to a progressive liberalization at periodic intervals; and (iv) that imports from certain developing countries that did not exceed a threshold were exempted from the duties. Third, the fact that India notified this investigation and measures to the WTO Committee on Safeguards pursuant to the provisions in Article XIX of the GATT 1994 and in the Agreement on Safeguards.

This reasoning offers some guidance as to how to approach the question of whether the U.S. Section 232 tariffs are safeguard measures, as claimed by the governments imposing retaliatory tariffs in response to the Section 232 tariffs. Let's go through each of the three elements the panel mentioned, to see how they would apply in the case of the Section 232 tariffs:

1. The first element is whether the competent authority "imposed the measure at issue and conducted the respective investigation under domestic legislation that authorizes the Government to impose duties on imports after determining that relevant products are being imported into India in increased quantities and under conditions so as to cause or threaten to cause serious injury to the domestic industry." That was not the case with the Section 232 tariffs, as, among other things, Section 232 does not look at serious injury (the standard under Section 232 is somewhat analogous, but it's clearly different).

2. On the second element, there are four sub-elements, 3 of which suggest that the Section 232 tariffs are not safeguard measures. While the duties are imposed on like imported products, they are not temporary (as far as we can tell at the moment), they are not subject to progressive liberalization at periodic intervals, and they do not exempt developing countries below a threshold.

3. And as for the third element, the United States did not notify the Section 232 investigation and measures to the WTO as safeguard measures.

7.30. In this dispute, most of the claims have been raised by Japan under Article XIX of the GATT 1994 and under different provisions of the Agreement on Safeguards. The parties have not questioned the applicability of Article XIX of the GATT 1994 or the Agreement on Safeguards to the dispute. Indeed, both parties agree that the challenged measure is a safeguard within the meaning of Article XIX:1(a) of the GATT 1994 and the Agreement on Safeguards.74 However, given the facts before us and the arguments made by the parties and third parties in this proceeding75, we consider it appropriate to examine whether the measure at issue falls within the scope of the Agreement on Safeguards and Article XIX of the GATT 1994, before addressing the merits of Japan's claims.

The panel later offered the following reasoning in support of its finding that the measure constitutes a safeguard measure:

7.75. We have already noted that the manner in which a Member's domestic law characterizes its own measures is not dispositive of the characterization of such measures under WTO law. Likewise, the manner in which a Member conducts an investigation or notifies measures to the WTO is not dispositive of the legal characterization of the measure. However, all these factors may be relevant elements when considering a measure's design and structure. In this regard, we find that the following elements confirm our conclusion. First, the fact that the Indian competent authority imposed the measure at issue and conducted the respective investigation under domestic legislation that authorizes the Government to impose duties on imports after determining that relevant products are being imported into India in increased quantities and under conditions so as to cause or threaten to cause serious injury to the domestic industry. Second, the fact that the measure at issue had the typical characteristics of a safeguard measure, including (i) that it resulted in duties imposed on imports of the like or directly competitive product to that produced by the affected domestic industry; (ii) that the duties were only temporary; (iii) that the measure was subject to a progressive liberalization at periodic intervals; and (iv) that imports from certain developing countries that did not exceed a threshold were exempted from the duties. Third, the fact that India notified this investigation and measures to the WTO Committee on Safeguards pursuant to the provisions in Article XIX of the GATT 1994 and in the Agreement on Safeguards.

This reasoning offers some guidance as to how to approach the question of whether the U.S. Section 232 tariffs are safeguard measures, as claimed by the governments imposing retaliatory tariffs in response to the Section 232 tariffs. Let's go through each of the three elements the panel mentioned, to see how they would apply in the case of the Section 232 tariffs:

1. The first element is whether the competent authority "imposed the measure at issue and conducted the respective investigation under domestic legislation that authorizes the Government to impose duties on imports after determining that relevant products are being imported into India in increased quantities and under conditions so as to cause or threaten to cause serious injury to the domestic industry." That was not the case with the Section 232 tariffs, as, among other things, Section 232 does not look at serious injury (the standard under Section 232 is somewhat analogous, but it's clearly different).

2. On the second element, there are four sub-elements, 3 of which suggest that the Section 232 tariffs are not safeguard measures. While the duties are imposed on like imported products, they are not temporary (as far as we can tell at the moment), they are not subject to progressive liberalization at periodic intervals, and they do not exempt developing countries below a threshold.

3. And as for the third element, the United States did not notify the Section 232 investigation and measures to the WTO as safeguard measures.